Asked by Christopher Wayne on Jul 01, 2024
Verified
The book value of bonds payable
A)carrying amount
B)face value
C)callable bond
D)indenture
E)term bond
F)convertible bond
G)serial bond
Carrying Amount
The book value of an asset or liability on the balance sheet, calculated by deducting any accumulated depreciation or amortization from the asset's initial cost.
Bonds Payable
Liabilities representing amounts owed by a company to bondholders, to be paid at a specified maturity date.
- Familiarize with the approach and accounting for bond issuance operations, considering both par value bonds and those issued with a discount or premium.
Verified Answer
PM
Priya Majumdar6 days ago
Final Answer :
a
Explanation :
Book value refers to the carrying amount of the bond, which may differ from the face value (B). Callable bonds (C) allow the issuer to redeem the bond before maturity. An indenture (D) is a legal agreement between the issuer and bondholders that outlines the terms of the bond. Term bonds (E) mature on a specific date, while serial bonds (G) mature in installments over time. Convertible bonds (F) can be converted into common stock at the option of the bondholder. None of these terms directly relate to book value.
Learning Objectives
- Familiarize with the approach and accounting for bond issuance operations, considering both par value bonds and those issued with a discount or premium.